Thursday, March 14, 2013

Politicians: Just Say No to Ethanol

The problem of government involvement in the markets is they without fail always screw it up and the result is unintended consequences. That's the case with ethanol, an artificial construct in America which couldn't survive without subsidies and worse: legal force requiring its use.

This is the case even with the horrid idea of corn-based ethanol, which demands enormous inputs that are worse than the alleged problem ethanol is being used to fix.

Now the industry is whining in Washington through their lobbyists as just about everyone is coming against the corn-based ethanol industry created by the government, but now not able to meet the goals imposed by that very government on it.

According to the shady federal law, big refiners like Exxon Mobil (XOM) are forced to use a specified amount of renewable fuels like ethanol annually. If they don't they have to buy production credits, which have soared in price on concerns the federal mandate for ethanol usage won't be met.

so we have an artificial industry, an artificial fuel, an artificial law, and an artificial payment energy companies must make in order to meet federal guidelines. No wonder everyone hates the American ethanol industry.

Among the haters of ethanol are groups trying to help the poor and hungry, who have to pay much more for food because of the rise in corn prices because of government laws. Not only is corn itself rising in price, but other foods that corn is used to feed like chickens and cattle, along with dairy products. Most food using corn also rises in price because approximately 40 percent of the corn crop goes into this loser of an industry which doesn't deserve to even exist because there is little real demand from consumers for it.

From an environmental viewpoint, not only is the inputs to grow corn among the highest in agriculture, but the need for more land to plant corn has led to the destruction of wetlands and grasslands.

While I'm not as concerned there, it does show the absolute hypocrisy of the government which pretends it is concerned about those areas until a pet program of the government overrides those alleged concerns.

Ethanol as an additive of any kind must be abandoned completely, and the market left to decide what it wants to use as a fuel.

The ethanol debacle confirms what most of us already know: the government doesn't belong in the market, and needs to keep its hands out of it.


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